The Real Issue with Social Security

Another valuable article in The Milken Institute Review this quarter is by David Levine on social security. He concludes,

[the] attempt to finesse the problem by banking on the stock market is almost certainly doomed to failure--quite possibly for both retirees and workers, but certainly for at least on of the groups...But sadly, the hollow promises of partial privatization continue to occupy center stage in the debate.

Of course, what Levine proposes is even more anathema to the Democrats and the AARP than stock market accounts.

By 2030...the ratio of covered workers to beneficiaries will have dropped to 2.1:1 and expenditures will exceed revenues by 32 percent. To close that gap, three options are available. We could raise the payroll tax rate from 21.4 percent to 16.4 percent, cut benefits by 24 percent, or reduce the number of beneficiaries by 18 percent (which would require an increase in the retirement age to approximately 70).

How painless! Simply by raising the retirement age in 2030 to 70, we solve the problem. I had never calculated the number, and I assumed it need to be much higher.

Discussion Question. Why is such a simple solution not endorsed by either major political party?